ED sees Panama Papers link to Telangana granite exports

HYDERABAD: The Enforcement Directorate has claimed that its searches of granite exporters' premises have established a Panama Papers link to some of the units in Karimnagar. Illegal funds sent from Chinese entities and individuals - named in the leaked Panama Papers - to Telangana-based granite companies were found after the recent raids, the ED claimed on Friday.
These Chinese entities were owned by Li Wenhuo. The Panama Papers, leaked in 2016, provided financial details of more than two lakh offshore entities, created mainly by the law firm Mossack Fonseca & Co, to help the uber rich evade taxes. The investigation named powerful and wealthy people across the globe who had allegedly stashed money abroad.
The ED also claimed to have found multiple benami bank accounts held in the names of employees of granite exporters.
Cash received against illegal exports was deposited in these benami accounts. The searches led to detection of money being routed from Chinese entities back into Indian entities in the form of hand loans without documents, the ED said.
The ongoing searches also yielded unaccounted cash of Rs 1 crore, which was allegedly received in hawala transactions for granite exports, the ED said. Agency sleuths seized from the quarries voluminous granite dispatch data covering 10 years and found multiple benami accounts of the suspects.
The searches were conducted on November 9 and 10 at the offices of Swetha Granite Exports Pvt Ltd, owned by minister Gangula Kamalakar’s family, Swetha Agencies, Sri Venkateshwara Granites Pvt Ltd, PSR Granites Pvt Ltd, Arvind Granites, Giriraj Shippi-ng Agencies Pvt Ltd and linked entities in Karimnagar and Hyderabad. The searches were conducted following complaints of tax evasion, undervaluation and FEMA violations. The ED, however, did not name Kamalakar in its statement.
“The exported quantity was more than the quantity on which royalty was paid and there was under-reporting of the quantity while exporting the granite blocks. In many instances, the export proceeds are not realised in the declared accounts, indicating that the export proceeds are received from channels other than banking channels,” the ED said.
The Kamalakar familyowned Swetha Granties was searched by the ED while Kamalakar was in Dubai. The minister, who has since come back to Karimnagar, told reporters that he will cooperate with the ED and that has not committed any irregularity. The ED took up the probe into illegal granite mining and FEMA violations by exporters following a report of the vigilance and enforcement department citing evasion of seigniorage fee on granite blocks transported from Karimnagar to ports in Andhra Pradesh.